NEW YORK, USA

Consumers’ confidence in August dropped almost 15 points to the lowest level since April 2009 as worries about the US economy fuelled the wildest stock market swings since the financial meltdown in 2008.

At a time when Americans are growing increasingly worried about a weak job market, higher costs for food and clothing and recent stock market turmoil, the falling confidence numbers raise new concerns about their willingness to spend and jumpstart the economy. That’s particularly important since consumer spending accounts for 70 per cent of US economic activity.

“Consumer confidence deteriorated sharply in August, as consumers grew significantly more pessimistic about the short-term outlook,” said Lynn Franco, director of The Conference Board Consumer Research Centre in a statement.

The Conference Board said yesterday that its Consumer Confidence Index fell to 44.5, down from a revised 59.2 in July. The number was the lowest level since April 2009 when the reading was 40.8. It also is far below the 53.3 that analysts had expected. A reading above 90 indicates the economy is on solid footing; above 100 signals strong growth.

A number of factors contributed to the index’s decline. The Conference Board Index — based on a random survey of consumers sent to 5,000 households from August 1 to 18 — captured the wildest week on Wall Street since the financial crisis in 2008.

Four days into the survey period, on August 5, S&P downgraded the US federal debt and concern revived about the health of European banks. Following that, the Dow Jones industrial average had four consecutive days of 400-point swings for the first time in its 115-year history during the week that ended August 12.

Besides debt talks and market fluctuations, Americans are still plagued by old economic worries. The nation’s unemployment rate is stuck at nine per cent. Home values remain weak. And shoppers are facing rising costs for everything from food to clothing as retailers try to offset their higher costs for labour and materials.

As a result, one gauge of the index that measures how shoppers feel about the economy dropped to 33.3 from 35.7. Another measure that assesses shoppers’ outlook over the next six months fell to 51.9, down from 74.9 last month.

Consumers’ views on jobs, in particular, have become more pessimistic. Those claiming that jobs are “hard to get” increased to 49.1 per cent from 44.8 per cent, while those stating jobs are “plentiful” declined to 4.7 per cent from 5.1 per cent.

Those anticipating more jobs in the months ahead decreased to 11.4 per cent from 16.9 per cent, while those expecting fewer jobs increased to 31.5 per cent from 22.2 per cent. The proportion of consumers anticipating an increase in their incomes dropped to 14.3 per cent from 15.9 per cent.

AP

CALIFORNIA, USA — In this August 26, 2011 photo, a young shopper peers into a box containing a CAT motorised job site machine, as he waits to get through the check-out at Costco in Mountain View, California. (Photo: AP)